Tuesday, March 14, 2006

A Man that Steals Billions of Dollars and is Still Admired and Accepted by America’s Main Stream

Milken is a prominent American financier who almost single-handedly created the present-day market for High-yield or junk bonds during the 1970s. After he was sent to prison on finance-related charges, he became the epitome of Wall Street "greed" during the 1980s, and was nicknamed "The Junk Bond King."After serving his sentence, Milken launched a public relations campaign to highlight his role as a great innovator and financier, particularly with regard to popularizing higher-risk alternative investments, while smoothing over his criminal record. He has also devoted much time and money to charity, leading some observers to accuse him of trying to buy back his good name, though his supporters point out that his philanthropy goes back to the 1970s, long before any controversy.A summa cum laude graduate of the University of California at Berkeley, where he was elected a member of Phi Beta Kappa, Milken received his master's degree in business administration from the University of Pennsylvania's Wharton School.

Legal chargesIn 1989, Rudy Giuliani, the United States Attorney for the Southern District of New York, charged him under the RICO act with 98 counts of racketeering and fraud, and he was indicted by a federal grand jury.After a plea bargain, Milken pled guilty to six lesser securities and reporting violations. He paid a $200 million fine and another $400 million in settlements relating primarily to civil lawsuits. He was banned for life from the securities industry.Judge Kimba Wood, at Milken's sentencing, told him:You were willing to commit only crimes that were unlikely to be detected...When a man of your power in the financial world...repeatedly conspires to violate, and violates, securities and tax business in order to achieve more power and wealth for himself...a significant prison term is required.Wood recommended a 10-year prison sentence, of which, in her opinion, Milken should have served at least 36 to 40 months. However, Milken served only about 22 months (from March 1991 to January 1993) before being released. Upon his release, it is estimated he still had about $700 million of his personal fortune intact. He has since entered numerous other business ventures.In 1998, without admitting any guilt, he returned $47 million in fees to settle another SEC lawsuit relating to the 1991 order barring him from the securities industry, which he allegedly overstepped when he advised MCI/News Corporation in a 1995 deal for which he received $27 million and when he advised Revlon chairman Ronald Perelman on a Revlon/New World Communications deal in 1996, for which he received $15 million. In the same year Time Warner acquired Turner Broadcasting, for which Milken received $50 million in advisory fees. That deal was not brought up in the court.